Sweden's Saab files for bankruptcy protection
Published 08/09/2011 | 05:00
THE owner of cash-strapped car maker Saab filed for bankruptcy protection yesterday in a last-ditch attempt to salvage a brand crippled by production stoppages, withheld salary payments and mounting debt.
Swedish Automobile, formerly known as Spyker Cars, said the move would buy it time to receive funding from Chinese investors, currently awaiting regulatory approval, and avoid bankruptcy.
The company, led by Dutch businessman Victor Muller, has so far failed to revive the loss-making Swedish brand since taking it over last year from General Motors, which was in the process of dismantling it.
The Saab factory in Trollhattan, southwestern Sweden, has been at a standstill for most of the year as the company struggles to pay suppliers.
Since June it hasn't been able to pay many of its 3,700 workers on time and labour unions have threatened to put the company into bankruptcy.
If approved by a Swedish court and Saab's creditors, an initial three-month court-administered reorganisation phase would halt any debt collection and potential bankruptcy filings. A ruling is expected today.
Mr Muller said the voluntary reorganisation would help stabilise the company and give it the breathing room to restart salary payments, get short-term funding and set in motion a production restart.
At present, Muller said Swedish Automobile has unpaid bills of about €150m ($210m).
Powertrain and Tools are included in the plan for a voluntary and "self-managed" reorganisation, while overseas units have been excluded.
The application for creditor protection, calls for cutting costs similar to a Chapter 11 bankruptcy filing in the US.
Mr Muller warned that the process would lead to "a number of tough issues and decisions."
Once Saab has been brought out of reorganisation, he plans to hand over the reins the CEO post to someone else, but not before.
"Quitting for me is not an option," he told a news conference.
Darko Davidovic, union legal adviser for IF Metall which represents around 1,500 Saab workers, welcomed the move as "it is the fastest way for our members to get their money''.
"All other alternatives would have been worse," he told The Associated Press, referring to a potential bankruptcy which would have drawn out payments.